June 14 (Bloomberg) -- Geothermal energy’s share of global
capacity may increase more than 10-fold by 2050 if governments
implement incentives, according to the International Energy
Agency.

Power generated from underground heat sources may account
for as much as 3.5 percent of worldwide electricity within four
decades, up from 0.3 percent now, the Paris-based agency said
today in a report on its website.

Streamlined permitting procedures and pricing incentives
may result in more than 200 gigawatts of installed geothermal
capacity by then, according to the IEA’s technology road map.

Taking advantage of underground heat resources that are
widely available will help reduce greenhouse gas emissions. High
costs have hampered development of power geothermal power
plants.

Geothermal development “can be an arduous process,” Mark
Taylor, an analyst at Bloomberg New Energy Finance’s Washington
office, said in a telephone interview. “You have to secure the
land, drill, risk not finding resources, drill some more and
then build a power plant,” and all that work drives up project
costs.

The IEA suggested that governments provide funding for at
least 50 pilot projects that generate electricity from dry rock,
which comprise most of the world’s usable subterranean heat.
Most existing geothermal projects are in areas with naturally
occurring hot water or steam, the IEA said.

Capital costs for geothermal projects varied from $2,000 a
kilowatt to $5,900 in 2008, depending on the technology,
according to the report.